US Sanctions Being Weakened by Lack of Transparency, Promise of Relief, CNAS Says

The power of U.S. sanctions has been “severely weakened” by the Trump administration's failure to follow through on lifting designations and is hampered by a lack of transparency, according to a Dec. 16 report from the Center for a New American Security. The administration can take several steps to maximize the effectiveness of its sanctions regimes, the report said, which will also indirectly “limit the unintentional escalation of international competition.”

Sanctioned companies and countries are increasingly losing confidence that the U.S. will remove designations, which does little to change targets' behavior and achieve U.S. policy goals, the report said. The U.S. should make its “sanctions-removal assurances more credible” by establishing a “track record of backing up its commitments.” This record has been weakened by the U.S.’s “failures” to follow through on “significant sanctions-removal agreements,” CNAS said, most notably with Iran and Cuba. Congress and Trump should better “uphold diplomatic agreements” involving sanctions removal, the report said, and Treasury and State Department officials should provide more guidance on a “credible path for delisting every sanctions designation.” Congress should also mandate analyses on the effects and effectiveness of sanctions to help inform sanctions legislation.

The administration should also better illustrate a sanctions escalation ladder for all of its regimes, which would help reduce the likelihood of “dangerous misunderstandings” caused by differing escalation methods against separate targets. CNAS suggested the National Security Council coordinate an interagency effort to create a “whole-of-government escalation framework,” the report said, which would improve “common understanding” with U.S. allies.

While the administration understandably “shrouds important aspects of sanctions enforcement in secrecy,” its lack of transparency leads to inaccurate perceptions of U.S. policy by multinational companies and foreign governments, the report said. More transparency about U.S. sanctions priorities and the U.S.'s reasoning behind certain designations would provide industry, allies and adversaries with “clearer signals … about what actions will earn them a place on a U.S. sanctions list,” CNAS said. To address this, Treasury should publish a “sanctions enforcement priorities” list, better publicize its major enforcement actions and conduct more industry outreach, the report said.